Comment by leftyted | Hacker News Reader

Comment by leftyted | Hacker News Reader

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> there should be a big consensus for universal conditionless free education, social security and health insurance backed by the government.

You allude to the best argument for these things, something like: "people are born into the world with a set of advantages and disadvantages they neither earned nor deserve, so we should do our best to even the playing field".

But you missed the mark in terms of identifying the best argument from the other side. "Because the market will solve it and those that work hard enough will make it, so it's fair" is not the argument. That's a just world hypothesis. The good argument is: high taxes and large social programs distort economic incentives; if you "tax the rich at 70%," people will behave differently, and your society will be less wealthy as a result. Which would you rather have? A wealthy society with inequality or a poor society without inequality? Anyway, the fundamental point here is that all human progress is agonistic, and "evening the playing field" will result in less progress, not more.

We're trying to walk the line between these two perspectives. We have "free" social programs but wealth still buys all kinds of advantages. I think we're doing a fairly good job, but it's imperative that we take both sides of this argument seriously. There's no reason to think we can have our cake and eat it.

> Which would you rather have? A wealthy society with inequality or a poor society without inequality?

This is a good as in goodwill and honest point here. However, I think it isn't a dichotomy based on evidence. For example, most of northern Europe has these programmes and they are not poor, and there exist many poor countries without these programmes. If I thought these programmes would leave the people less wealthy, healthy, happy, I would be against them.

If the programmes create negative incentives in people as to not be productive and successful to a degree that offsets the advantages in reduced crime, more tax because of higher educated people and thus salary and countless other and not easily measured advantages like progress on science, culture, and art, then I would be against those programmes. This is however not what we are seeing. It is a scary shadow on the wall while we can see the cute bunny in the foreground with our eyes directly.

That’s a falsifiable argument. US has averaged faster economic growth with high marginal tax rates than low ones. The reality is rich people have no choice but to invest their wealth or inflation eats it up. The only real change from 15% to 70% marginal tax rates is the amount of effort put into tax avoidance. The reason for this is maximizing income occurs before taxes are calculated, so you can get nearly identical behavior independent of tax rates.

Further, equality of opportunity is surprisingly cheap over time. You end up with more capable workforce which pays for the cost of maintaining it.

PS: Now targeted deductions are another story, those can cause real economic harm.

I don't think you've falsified the argument. Maybe you would have if economic growth and marginal tax rates are the only variables.

I think it's pretty clear that progressive taxes create negative incentives, particularly when it comes to encouraging people to get rich in the first place (which usually means starting a business).

> Further, equality of opportunity is surprisingly cheap over time. You end up with more capable workforce which pays for the cost of training it.

Yeah, the question is where to draw the line. Public education seems like something we definitely want. But if we truly want equality of opportunity, I don't think we can have communities like this:

> Schull is a very small community, couple of thousand max but there's been a lot of 'alternative' type immigration there from other first world countries, artists etc from places like England (eg Jeremy irons), Netherlands so its secondary school is pretty progressive afaik. They have a slipway to the bay right next to the school so the school does sailing classes etc. The planetarium in question is a stone's throw from the school. County Cork has a youth orchestra. Overall not the worst place in the world to grow up.

Everyone can't have sailing lessons and a planetarium.

Plenty of evidence for the same thing exist in other countries. Which is my point, if that’s your line of argument you need to verify it not just assume it to be true.

Anyway, few people are going to turn down becoming rich because they end up with only 100 million instead of 300 million dollars. Opportunity however plays an important role and again you can measure relative importance via social mobility. Comparing different counties at different time periods and once again Opportunity ends up far more important than high but not punitive tax rates.

We are never going to have absolutely identical opportunity for everyone in society. But, these are not platonic ideals rather measurable and testable pragmatic choices.

> Which would you rather have? A wealthy society with inequality or a poor society without inequality?

Is a powerful false dichotomy argued by the rich. It is NOT a poor society, but people fear they would be less rich, when 99% of them won't be if you add in the societal benefits.

Just having good education is going to make your country wealthier in a generation.

That's ok as far as it goes, but it's not very far. To be convincing, the argument about negative incentives resulting in lower growth needs to be expanded on more than it usually is. (Or is reasonable to do in casual conversation.)

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